The Maritime Union of Australia v Qube Logistics (SB) Pty Ltd

[2018] FWC 1688

[2018] FWC 1688

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.238 - Application for a scope order

The Maritime Union of Australia
v
Qube Logistics (SB) Pty Ltd
(B2018/135)

COMMISSIONER CAMBRIDGE SYDNEY, 27 MARCH 2018

Application for a scope order.

[1] This Decision involves an application for a scope order which was made pursuant to section 238 of the Fair Work Act 2009 (the Act). The application was made on 28 February 2018 by The Maritime Union of Australia (MUA). The respondent has been identified as Qube Logistics (SB) Pty Ltd (Qube or the employer).

[2] Proceedings in this matter commenced before the Fair Work Commission (the Commission) on 1 March 2018, at which time the Parties identified and agreed that it was appropriate that the Transport Workers’ Union of Australia (TWU) be granted an opportunity to appear in the matter. The Commission granted permission for any of the Parties to be represented by lawyers or paid agents. The Commission was satisfied that the requirements of s. 596 of the Act were met because certain complexity was identified and the assistance of lawyers or paid agents would enable the matter to be dealt with more efficiently having regard for the complexity of the matter.

[3] Further proceedings involving the participation of the TWU were held on 2 March 2018. The Parties agreed upon certain arrangements that allowed the matter to proceed to an expedited Hearing conducted in Sydney over two days, 21 and 23 March 2018.

[4] The arrangements for the expedited Hearing involved an agreement being reached between the Parties, (the MUA, Qube and the TWU), that essentially suspended the enterprise bargaining process that had been conducted, and almost concluded, in respect to an enterprise agreement to replace the Qube Logistics (NSW) and the TWU - Road Transport Enterprise Agreement 2014 (the 2014 Agreement).

[5] At the Hearing Mr S Crawshaw, of Senior Counsel, appeared for the MUA, and Mr M Seck of Counsel appeared for Qube. The TWU was represented by Mr M Gibian of Counsel.

[6] During the Hearing the MUA adduced evidence from three witnesses all of whom had made written statements in support of the application. Qube also provided witness evidence from two individuals each of whom had made witness statements in support of Qube’s opposition to the application for a scope order. All of the witnesses for the MUA and for Qube were required for cross-examination. The TWU opposed the MUA application for a scope order, and it introduced evidence in the form of three witness statements, two of which were not contested and introduced into evidence without the deponents being required for cross-examination. One of the witnesses for the TWU was cross-examined on his evidence.

[7] At the conclusion of the Hearing on 23 March, the Commission reserved Decision and indicated to the Parties that because of the obvious implications for the progress of the enterprise bargaining for a replacement agreement for the 2014 Agreement, a Decision in this matter would be prioritised.

Summary of Relevant Background

[8] Qube is a Company which is part of the Qube Group of Companies. Qube conducts a road transport and distribution business throughout Sydney and it has operational sites located in the Sydney suburbs of Yennora, Minto and Port Botany (the Sydney sites). Qube employs approximately 147 truck drivers who operate a fleet of approximately 74 trucks and who work from one or more of the Sydney sites.

[9] The work of the truck drivers employed by Qube at the various Sydney sites has been regulated by, and is currently covered by, the 2014 Agreement. The 2014 Agreement applies to and covers; Qube; employees of Qube working from the Sydney sites; and the TWU. The 2014 Agreement expired on 1 June 2017.

[10] In early June 2017, Qube and the TWU formally commenced bargaining for a replacement enterprise agreement for the 2014 Agreement. At around the same time, the MUA sought to commence negotiations with Qube in respect to an enterprise agreement to cover particular truck driving work involving a rail loop at the Patrick Stevedores terminal at Port Botany (the rail loop driving).

[11] The rail loop driving work had, up until about June 2017, been performed by employees of Qube, many of whom were members of the TWU, and whose terms and conditions of employment were regulated by the 2014 Agreement. On and from about June 2017, a number of individuals performing the rail loop driving work became members of the MUA.

[12] The MUA sought to negotiate an enterprise agreement for its members performing the rail loop driving work which would be separate from any enterprise agreement made to replace the 2014 Agreement. Essentially, the MUA sought to excise the rail loop driving work from the coverage of any enterprise agreement to replace the 2014 Agreement.

[13] Qube has resisted the MUA endeavours to negotiate a separate enterprise agreement for the rail loop driving work. The MUA has sought to reference the terms and conditions applicable to the rail loop driving work to the Stevedoring Industry Award 2010 (Stevedoring Award), and Qube has strongly opposed this approach, and maintained that the rail loop driving work, along with other aspects of its operations from the Sydney sites, is appropriately referenced to the Road Transport and Distribution Award 2010 (Transport Award).

[14] The negotiations between Qube and the TWU for a replacement enterprise agreement for the 2014 Agreement progressed during the second half of 2017, and ultimately agreement was reached. Separately, negotiations between Qube and the MUA for a discrete agreement to cover the rail loop driving work did not result in any concluded agreement.

[15] Qube reached agreement with the TWU about the terms of an enterprise agreement to replace the 2014 Agreement, and it commenced to have the replacement agreement (the 2017 Agreement) made by vote of the relevant employees. Shortly after the voting process for the 2017 Agreement was initiated by Qube, the MUA made the application for a scope order which, if successful, would remove the rail loop driving work from any enterprise agreement to replace the 2014 Agreement, and require Qube to negotiate a separate agreement to cover the rail loop driving work.

The Case Advanced by the MUA

[16] The MUA provided written submissions which were elaborated upon verbally by Mr Crawshaw during the Hearing on 23 March 2018. The MUA submitted that it had satisfied the variousproceduralrequirements which apply as prerequisites to the making of a scope order.

[17] The MUA submitted that it was a bargaining representative, and it had concerns that bargaining for an agreement was not proceeding efficiently or fairly as it considered that the agreement would not cover appropriate employees or would cover inappropriate employees. According to the submissions made by the MUA, the MUA met the requirements of subsection (1) of s. 238 of the Act.

[18] The MUA further submitted that the evidence established that it had given notice of its concerns to both Qube and the TWU, and it provided a reasonable time within which Qube and the TWU had responded to those concerns. Consequently, the MUA submitted that the requirements of subsection (3) of s. 238 of the Act had been satisfied.

[19] Further, the MUA made submissions which it said addressed the requirements of subsections (4) and (4A) of s. 238 of the Act. The MUA submitted that it had met, and was meeting the good faith bargaining requirements of subsection 238 (4) (a) of the Act as it said there had been extensive and comprehensive negotiations between Qube and the MUA regarding the proposed enterprise agreement to cover the rail loop driving work.

[20] The submissions made by the MUA also dealt with the question of whether the making of the scope order would promote the fair and efficient conduct of bargaining as contemplated by subsection 238 (4) (b) of the Act. In this regard, the MUA submitted that the rail loop employees should be properly seen as being engaged in stevedoring operations because they were working in the chain of loading and unloading of cargo into and from ships, or, alternatively, the prior and subsequent handling in the vicinity of the wharf when that handling is for the purpose of the ultimate shipping or discharging of that cargo. Consequently, the MUA asserted that fair and efficient bargaining would be promoted if the rail loop employees were able to argue in negotiations for stevedoring conditions of employment which are superior to the conditions of employment for road transport employees.

[21] In addition, the submissions of the MUA noted the evidence that those employees engaged in the rail loop driving work interfaced with stevedoring employees and they worked alongside direct employees of Patrick Stevedores, under the direction of Patrick Stevedores supervisors and using the Patrick Stevedores communication systems. The MUA submitted that the rail loop employees were fully integrated into Patrick Stevedores terminal operations and they performed work similar to that performed elsewhere by direct employees of stevedoring companies.

[22] According to the further submissions of the MUA, fair and efficient bargaining would also be promoted by having two separate agreements where separate negotiations had been taking place with the MUA representing the rail loop employees and the TWU representing other employees. According to the MUA, this was an appropriate arrangement for the negotiations because it had been demonstrated that the rail loop employees had a very different interest and clear desire to argue in negotiations for stevedoring conditions of employment which are superior to the conditions of employment prevailing for road transport employees.

[23] Further, the MUA submissions addressed the requirements of subsection (4A) of s. 238 of the Act. The MUA submitted that the rail loop employees were a group of employees that was fairly chosen because they were geographically, operationally and organisationally distinct from the other employees covered by the proposed agreement who were not involved in stevedoring operations and did not work at the Patrick terminal. The submissions of the MUA also noted that the rail loop employees sought to advance a number of claims which diverged from those that were advanced by the TWU in respect of the road transport workers employed by Qube. It was submitted that the MUA members engaged in rail loop driving work should have a fair opportunity to pursue their claims for stevedoring industry terms and conditions of employment.

[24] Mr Crawshaw who appeared for the MUA made further submissions which focused upon the limitation that would apply to the scope of an enterprise agreement that was established for those employees of Qube who were substantially engaged in the rail loop driving work. According to the submissions made by Mr Crawshaw, any terms and conditions that were applicable to rail loop driving work would not necessarily apply to employees of Qube who were only incidentally or infrequently engaged in the rail loop driving work.

[25] Further, Mr Crawshaw made submissions which referred to the eligibility rules of the MUA. Mr Crawshaw submitted that the work of those employees of Qube who were predominantly engaged in rail loop driving work was clearly comprehended by the eligibility rules of the MUA. Mr Crawshaw referred to various Full Federal Court Decisions which had dealt with the question of the occupation of a "waterside worker" and the application of the predominant working activities test in the context of the eligibility rules of the MUA.

[26] Mr Crawshaw made submissions which strongly opposed any suggestion that the MUA was not entitled to enrol as members those employees of Qube who were predominantly engaged in rail loop driving work. Mr Crawshaw submitted that the rail loop employees were engaged in stevedoring operations because they were involved in loading and unloading of containers to or from ships, or alternatively, in the prior or subsequent handling or transportation of containers at or in the vicinity of the wharf.

[27] Mr Crawshaw also made submissions which acknowledged that there was an important distinction between questions of contested eligibility of a registered organisation and industrial Award coverage. Further, in respect to the question of appropriate industrial Award coverage, Mr Crawshaw made submissions which challenged Qube's reliance upon the Full Bench Decision in the case of The Maritime Union of Australia v Patrick Container Port Pty Ltd  1 (Container Port Case). Mr Crawshaw said that a distinction could be made between the circumstances of the rail loop driving work and the circumstances that were involved in the Container Port Case. Further, Mr Crawshaw said that it was clear that an employer could operate in more than one industry.

[28] In summary, it was submitted by Mr Crawshaw that: (a) the MUA application for a scope order had been made in accordance with the procedural requirements established in s. 238 the Act; and (b) the MUA had met the good faith bargaining requirements of the Act; and, (c) that the making of the proposed scope order would promote the fair and efficient conduct of bargaining; and (d) the group of employees to be covered by an agreement as proposed in the scope order had been fairly chosen having regard for the provisions of subsection (4A) of s. 238; and, (e) it was reasonable in all the circumstances to make the scope order sought by the MUA.

The Case Advanced by Qube

[29] Mr Seck, who appeared for Qube, opposed the application and submitted that the Commission should not make the scope order sought by the MUA.

[30] The submissions made by Qube firstly challenged the right of the MUA to enrol as members the employees of Qube engaged in the rail loop driving work. Qube submitted that the persons performing the rail loop driving work were not employed solely or predominantly in that work but instead were required to drive at different sites. Further, even if some of the rail loop driving work involved individuals working predominantly in that work, they were not actually involved in the loading or unloading from a ship nor the storage or stacking of cargo from a ship. Further, those employees engaged in the rail loop driving work were not employed by a stevedoring company but by a road transport and logistics company.

[31] Consequently, Qube submitted that those persons engaged in the rail loop driving work were not, by virtue of that employment, entitled to become and remain members of the MUA. Therefore, Qube submitted that the MUA was not an organisation that was entitled to represent the industrial interests of those persons employed either predominantly or otherwise in the rail loop driving work. Accordingly, Qube said that the MUA could not demonstrate that it had been validly appointed as a bargaining representative because it was not entitled to enrol as members the employees of Qube who were either predominantly or incidentally engaged in the rail loop driving work.

[32] The submissions made by Qube also addressed the requirements of subsections (4) and (4A) of s. 238 of the Act and asserted that; (a) the MUA had not bargained in good faith, and; (b) the scope order sought by the MUA would not promote fair and efficient conduct of bargaining, and; (c) the group of employees that the MUA scope order sought to carve out of the operation of the proposed 2017 Agreement was not fairly chosen, and; (d) it was not appropriate or reasonable in the circumstances to make the scope order.

[33] Qube submitted that the MUA had not engaged in good faith bargaining and it made particular criticism that the MUA had left the application for a scope order to a point in time which it described as being past the eleventh hour. Further, Qube submitted that the scope order proposed by the MUA would not promote the fair and efficient conduct of bargaining. Qube said that the proposed scope order would lead to dual track negotiations whereby Qube was required to negotiate separately with the TWU and the MUA.

[34] In further submissions, Qube stated that the proposition for a separate agreement to cover just the rail loop driving at Port Botany would be unworkable and unfeasible. Qube submitted that it would have practical difficulties being able to roster employees to work on other tasks outside of the rail loop driving work and it would have difficulty establishing which of the two enterprise agreements applied to employees who at different times may perform identical work.

[35] It was further submitted by Qube that the group of employees proposed by the scope order sought by the MUA was not a group of employees that was geographically, operationally or organisationally distinct. Qube submitted that its operations involved flexible interchangeability between the various Sydney sites and that if it had to have some small proportion of its employees engaged in the rail loop driving work covered by a different enterprise agreement significant inefficiencies would be created. Further, Qube submitted that the work performed by the rail loop drivers did not represent a distinct group and that even in cases where workers were predominantly required to work on the rail loop driving they were also required to perform other work such as driving to the Customs site.

[36] In final submissions, Mr Seck asserted that the notice requirements established under ss. 238 (1) and 238 (3) of the Act, had not been met by the MUA. Mr Seck submitted that the MUA had narrowed the scope position as the matter had progressed such that the notifications that had been made to the other bargaining representatives involved a different scope to that which had been sought during the Hearing.

[37] Mr Seck made further submissions which challenged that the group of employees that were the subject of the final version of the scope order had been fairly chosen. Mr Seck made submissions which criticised the potential vagaries of the proposed scope involving any assessment as to which of the rail loop drivers would qualify to have been engaged predominantly in that work. Further, Mr Seck submitted that at best estimate, there might be four or five employees who might be comprehended by the proposed scope order as it was now understood.

[38] Mr Seck also submitted that it would not be reasonable in all of the circumstances to make the scope order sought by the MUA because it would significantly disrupt the operational arrangements across Qube’s Sydney sites, and it would also disrupt the enterprise bargaining process for an agreement to replace the 2014 Agreement which had almost been completed. In this regard, Mr Seck made submissions which reasserted that the MUA had failed to bargain in good faith because they had failed to bring the application for a scope order earlier and that the delay in bringing the application for a scope order should operate as a significant factor against granting the MUA application.

[39] In summary, Mr Seck submitted that the MUA did not have standing to bring the application as it could not properly establish that it had been validly appointed as a bargaining representative. Mr Seck submitted that the notification requirements for a scope order had not been met, and that the MUA had not been bargaining in good faith. Further, Mr Seck submitted that the scope order would not promote fair and efficient conduct of bargaining, nor was the group specified in the scope order fairly chosen as they were not a group of employees that was geographically, operationally or organisationally distinct. Mr Seck urged the Commission to refuse the application.

The Case Advanced by the TWU

[40] The submissions made by the TWU opposed the making of the scope order. However, the TWU made no submission as to whether the MUA had taken all reasonable steps to give written notice setting out its concerns about the bargaining. Further, the TWU made no submission as to whether the MUA had met or was meeting the good faith bargaining requirements because it had not been directly involved in bargaining discussions involving the MUA and Qube.

[41] The TWU submitted that the making of the scope order would not promote the fair and efficient conduct of bargaining. The TWU noted that bargaining for an agreement to replace the 2014 Agreement had been ongoing since about May 2017, and that the terms of a new agreement had been finalised between the TWU and Qube. Further, the submissions of the TWU noted that the proposed new agreement had been put to a vote of employees on 9 March 2018.

[42] In further submissions, the TWU asserted that the group of employees proposed to be covered by an agreement with the scope proposed by the MUA application, was not a group of employees that had been fairly chosen. The TWU submitted that the proposed scope order involved a group of employees who are not geographically, operationally or organisationally distinct.

[43] In support of this submission, the TWU referred to evidence that the rail loop driving work was work performed by employees who were also engaged in transport work from other of the Sydney sites, and that Qube regularly rostered employees to work from the different Sydney sites. The TWU also submitted that the rail loop driving work as currently undertaken by Qube, and as previously undertaken by predecessor operators at Port Botany, had been covered by industrial instruments that were based upon transport conditions and not stevedoring conditions.

[44] Further, the submissions made by the TWU opposed the making of the scope order on the basis that it would not be reasonable in all the circumstances to make the order sought. The TWU noted that the bargaining for an agreement to replace the 2014 Agreement had been finalised and the scope order would only potentially impede and delay the operation of any new agreement and thus disadvantage the TWU members employed by Qube.

[45] Mr Gibian, who appeared for the TWU, made further submissions in elaboration of the documentary position that had been filed for the TWU. In final submissions, Mr Gibian reiterated that the rail loop driving work had been historically conducted by transport workers and the proposition that this was stevedoring work should be rejected.

[46] Mr Gibian noted what he said were the potential difficulties that would arise from the imprecision of the proposed scope order which may or may not cover 4 or 5 of the approximately 22 employees of Qube who work at Port Botany. Mr Gibian submitted that the scope order should not be made for such a small and ill-defined group of employees as it would, amongst other things, create significant uncertainty.

[47] Mr Gibian, on behalf of the TWU, urged the Commission to refuse the scope order.

Consideration

[48] In this case the MUA has sought a scope order which would have the practical effect of separating those employees of Qube who predominantly perform the rail loop driving work from the remainder of its employees. Essentially, this scope was proposed on the basis that the rail loop driving work should be more appropriately referenced to the Stevedoring Award rather than the Transport Award. The existing coverage established by the 2014 Agreement covered all of Qube’s employees, including the rail loop driving work, and it was referenced to the Transport Award.

[49] The application for a scope order was made in response to advice that Qube would put an agreement to replace the 2014 Agreement to a vote of employees for approval. Consequently, the time at which the application for a scope order was made has introduced the assertion that it represented conduct contrary to the good faith bargaining requirements of the Act. The timing of the scope application must, on any objective assessment, be seen as involving regrettable delay such that it has, and would have been likely to, disturb the efficient progress of the bargaining for an agreement to replace the 2014 Agreement.

[50] A scope order application of the nature advanced by the MUA in this case could have and should have been made much earlier. This is a matter that impacts upon the issues of good faith bargaining, fair and efficient conduct of the bargaining, and whether it would be reasonable in all the circumstances to make the scope order.

[51] The making of scope orders is governed by the provisions of ss. 238 and 239 of the Act which are in the following terms:

“238 Scope orders

Bargaining representatives may apply for scope orders

(1) A bargaining representative for a proposed single-enterprise agreement may apply to the FWC for an order (a scope order) under this section if:

(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and

(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.

No scope order if a single interest employer authorisation is in operation

(2) Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.

Bargaining representative must have given notice of concerns

(3) The bargaining representative may only apply for the scope order if the bargaining representative:

(a) has given a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and

(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and

(c) considers that the relevant bargaining representatives have not responded appropriately.

When the FWC may make scope order

(4) The FWC may make the scope order if the FWC is satisfied:

(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and

(b) that making the order will promote the fair and efficient conduct of bargaining; and

(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and

(d) it is reasonable in all the circumstances to make the order.

Matters which the FWC must take into account

(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Scope order must specify employer and employees to be covered

(5) The scope order must specify, in relation to a proposed single-enterprise agreement:

(a) the employer, or employers, that will be covered by the agreement; and

(b) the employees who will be covered by the agreement.

Scope order must be in accordance with this section etc.

(6) The scope order:

(a) must be in accordance with this section; and

(b) may relate to more than one proposed single-enterprise agreement.

Orders etc. that the FWC may make

(7) If the FWC makes the scope order, the FWC may also:

(a) amend any existing bargaining orders; and

(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by the FWC, or take such other actions, as the FWC considers appropriate.

239 Operation of a scope order

A scope order in relation to a proposed single-enterprise agreement:

(a) comes into operation on the day on which it is made; and

(b) ceases to be in operation at the earliest of the following:

(i) if the order is revoked—the time specified in the instrument of revocation;

(ii) when the agreement is approved by the FWC;

(iii) when a workplace determination that covers the employees that would have been covered by the agreement comes into operation;

(iv) when the bargaining representatives for the agreement agree that bargaining has ceased.”

[52] Subsections (4) and (4A) of s. 238 are the primary operative provisions in respect to the making of a scope order. In this instance, the opposition to the making of the scope order has primarily relied upon an alleged absence of satisfaction of subsections (4) and (4A) and also upon an alleged lack of standing of the MUA on the basis that it was not entitled to represent the industrial interests of those persons for which it claims to be a bargaining representative. On the final day of Hearing, Qube sought to further challenge the application for a scope order on the basis that the notice requirements of ss. 238 (1) and 238 (3) of the Act had not been met.

The Eligibility of the MUA Issue - s. 238 (1)

[53] It was asserted that the MUA was not entitled to make the scope order application because it could not be a bargaining representative as stipulated in s. 238 (1) of the Act. Qube asserted that the MUA could not be a bargaining representative because it was not entitled to represent the industrial interests of Qube employees engaged in the rail loop driving work. This aspect of objection to the scope order introduced the issue as to whether the MUA eligibility rules permitted it to enrol as members any of the Qube employees engaged in the rail loop driving work.

[54] Rulings in respect to the application of the eligibility rules of a registered organisation are matters that can have significant consequences for the particular registered organisation, various other registered organisations, and there are also potentially broader public interest considerations. In my view it would be undesirable to make any findings in respect to the application of the eligibility rules of a registered organisation in proceedings such as a scope order application which has been expedited, as in this instance, unless it was clearly necessary to do so.

[55] Consequently, as the question of the proper application of the MUA eligibility rules is not, in this instance, an issue that must be resolved in order to determine the scope order application, it is unnecessary for the Commission to make any findings or conclusions as to the contest about the proper application of the MUA eligibility rules in respect to the rail loop driving employees of Qube. Therefore, the determination of this matter has proceeded upon the assumption that the MUA was a bargaining representative for the purposes of making the scope order application.

The Discretionary Factors for a Scope Order - ss. 238 (4) and (4A)

[56] There are four factors which can be extracted from an examination of the terms of subsections (4) and (4A) of s. 238 of the Act all of which must be satisfied if any scope order is to be made.

[57] These four factors can be described as:

(1) Good Faith Bargaining; and

(2) Promote Fair and Efficient Bargaining, and

(3) Fairly Chosen, and

(4) Reasonable in the Circumstances.

Good Faith Bargaining - s. 238 (4) (a)

[58] In this instance Qube has asserted that the MUA had not been bargaining in good faith. In particular it was said that the lateness of the making of the scope order application was conduct of the MUA which breached the good faith bargaining requirements as set out in s. 228 of the Act. In this regard, Qube focused upon the assertion that the making of the late scope order application was conduct that was capricious or unfair, and which undermined freedom of association or collective bargaining.

[59] It is clear that if the Commission was satisfied that an applicant for a scope order had not met the good faith bargaining requirements of s. 228 then that applicant would not be entitled to have their application granted. The good faith bargaining requirements contained in s. 228 are as follows:

“228 Bargaining representatives must meet the good faith bargaining requirements

(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:

(a) attending, and participating in, meetings at reasonable times;

(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;

(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;

(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;

(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;

(f) recognising and bargaining with the other bargaining representatives for the agreement.

(2) The good faith bargaining requirements do not require:

(a) a bargaining representative to make concessions during bargaining for the agreement; or

(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.”

[60] It was clear from the evidence that at an early stage of the bargaining Qube had firmly resisted the approach of the MUA involving a separate enterprise agreement for those employees engaged in the rail loop driving work 2. This resistance would have been, on any objective contemplation, unsurprising, particularly because of the scope of the existing industrial regulation under the 2014 Agreement. Further, given the clear contrast that exists between the Stevedoring Award and the Transport Award it would have been apparent to the MUA that Qube would have been likely to have resisted any introduction of Stevedoring Award conditions into an operation that had historically referenced the Transport Award.

[61] Further, the MUA would have understood that the demarcation of industrial Award coverage between the Stevedoring Award and the Transport Award had been clearly determined in the Container Port Case. Where there is an interface between stevedoring work and transport work the Full Bench Decision in the Container Port Case made the demarcation between the Stevedoring Award and the Transport Award very clear when it stated:

“In our view the Commissioner was correcting in concluding that the coverage of the Stevedoring Award is confined to employers involved in the loading and unloading of cargo from ship.” 3

[62] Consequently, the proposition that the Stevedoring Award would apply to a transport company such as Qube must have been realistically assessed by the MUA to have been something that could be generously described as extremely ambitious. The MUA was aware of this position from the outset when it enrolled Qube rail loop drivers as members. The subsequent conduct of the MUA whereby, without first making an application for a scope order, it continued to agitate for the stevedoring conditions against the firm rejections made by Qube, was conduct that has to be considered in the context of the somewhat unrealistic prospects that existed for establishing any separate Stevedoring Award based enterprise agreement covering only rail loop driving work undertaken by employees of a transport and logistics company.

[63] In the absence of the formation of a single bargaining unit with the TWU, Qube, somewhat reluctantly, engaged in separate bargaining with the MUA. However, in those negotiations Qube naturally resisted the introduction of Stevedoring Award conditions, and strongly maintained that if any terms were agreed upon they would not be reflected in a separate enterprise agreement that was described to “carve out that gene pool currently servicing the Patrick Rail contract.” This position was documented again by Qube on 9 October 2017, and reinforced during a meeting with the MUA held on 1 November 2017.

[64] By this time, circa 1 November 2017, it would have been obvious to the MUA that it would not obtain any agreement from Qube for terms to be included in any separate enterprise agreement which referenced Stevedoring Award conditions. The position adopted by Qube was clear. It would negotiate with the MUA about certain variations that fell within the auspices of a single enterprise agreement that was referenced to the Transport Award. On any reasonable assessment, the MUA should have realised that it would only be successful with its enterprise bargaining for the rail loop driving work if it obtained a scope order to excise that work from the coverage that had been established in the 2014 Agreement.

[65] Regrettably, rather than making an application for a scope order, the MUA continued to agitate for what it described as the “MUA stand-alone rail operations enterprise agreement.” Realistically, and despite the particular requirements set out in s. 228 of the Act, the pursuit of bargaining in such circumstances would fundamentally involve an absence of good faith, and instead present as the ongoing pursuit of an unrealistic proposition in a manner that would not produce any agreed outcome, but instead do no more than inflict disruption, inconvenience and cost upon Qube, its employees, and the TWU.

[66] Therefore, upon a careful examination of the conduct of the bargaining which occurred without the MUA taking what it must have recognised to have been a necessary prerequisite to any successful outcome, namely a scope order, the subsequent late filing of the application for a scope order, has established that the conduct of the MUA breached the good faith bargaining requirements. Specifically, the late filing of the application for a scope order amounted to conduct that involved the MUA not responding to the proposal of the other bargaining representatives, Qube and the TWU, in a timely manner as required by subsection 228 (1) (c) of the Act.

[67] Further, the late filing of the scope order application has disturbed and threatened the successful finalisation of bargaining which has resulted in an agreement being reached between Qube and the TWU, and which has been the subject of vote of the relevant employees. Therefore, the late filing of the scope order application, in the particular circumstances of the bargaining that has taken place, represents capricious conduct that undermines collective bargaining and thus, it is conduct that offends subsection 228 (1) (e) of the Act.

Promote Fair and Efficient Bargaining - s. 238 (4) (b)

[68] A clear and unavoidable consequence of the making of the scope order would be that the enterprise bargaining for an agreement to replace the 2014 Agreement would have to recommence. The bargaining would have to restart with separate Notices of Employee Representational Rights (NERR) being issued so that each NERR identified the altered scope.

[69] The negotiations which were formally activated by the NERRs issued on 8 June 2017, and the bargaining that subsequently resulted in agreement between Qube and the TWU would become something of a significant waste of time and effort. In numerous instances where applications for scope orders have been made after a considerable amount of time and energy has been expended in the bargaining process, the practical implication of the granting of any “late” scope order would render much of the prior bargaining to have been wasted. Interestingly, the MUA advanced such an argument in the matter of The Australian Maritime Officers' Union v Harbour City Ferries Pty Ltd and Others 4.

[70] Ordinarily, if an application for a scope order is to be made, it would need to be taken at an early stage of the bargaining process if it is to satisfy the requirement that it would promote efficient bargaining. In this instance, there would clearly be significant inefficiency created if the scope order was granted and the bargaining had to recommence upon the altered scope terms.

[71] In respect to the question of fairness, although it would be understandable that persons engaged in the rail loop driving work would see it as fair for them to obtain the more attractive terms and conditions emanating from the Stevedoring Award, the position of the other drivers at the various Sydney sites must also be considered. There would be some considerable unfairness inflicted upon the drivers who were not included in the scope order if the pursuit of the scope order resulted in delay or reduction in them obtaining improvements in their terms and conditions of employment via successful enterprise bargaining, albeit referenced to the Transport Award.

[72] Consequently, there is no basis upon which the Commission could conclude that the making of the scope order would promote fair and efficient bargaining. On the contrary, the scope order would create a manifest inefficiency in respect of the bargaining that has already been conducted and almost completed. Further, the scope order would be likely to unfairly deprive or delay improvements in terms and conditions of employment for the other employees who were not encompassed by it.

Fairly Chosen - s. 238 (4) (c)

[73] The factor in subsection (4) (c) regarding whether a group is fairly chosen is modified by subsection (4A) which introduces some specific requirements that must be considered in order to establish that a group, other than a group comprising all employees, has been fairly chosen. Subsection (4A) introduces into any assessment as to whether or not a group has been fairly chosen consideration of whether the group is geographically, operationally or organisationally distinct.

[74] There have been numerous Decisions which have examined the approach to an assessment as to whether a group of employees was geographically, operationally or organisationally distinct. It is instructive to refer to a Full Bench Decision of Fair Work Australia in the case of Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union; The Australian Workers’ Union; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (Cimeco). 5

[75] The following extract from the Full Bench Decision in Cimeco is relevant:

“[19] Given the context and the legislative history it can reasonably be assumed that if the group of employees covered by the agreement are geographically, operationally or organisationally distinct then that would be a factor telling in favour of a finding that the group of employees was fairly chosen. Conversely, if the group of employees covered by the agreement was not geographically, operationally or organisationally distinct then that would be a factor telling against a finding that the group was fairly chosen.

[20] It is important to appreciate that whether or not the group of employees covered by the agreement is geographically, operationally or organisationally distinct is not decisive, rather it is a matter to be given due weight, having regard to all other relevant considerations.

[21] It is not appropriate to seek to exhaustively identify what might be the other relevant considerations. They will vary from case to case and will need to be demonstrated to the satisfaction of the tribunal. The word ‘fairly’ suggests that the selection of the group was not arbitrary or discriminatory. For example, selection based upon employee characteristics such as date of employment, age or gender would be unlikely to be fair. Similarly, selection based on criteria which would have the effect of undermining collective bargaining or other legislative objectives would also be unlikely to be fair. It is also appropriate to have regard to the interests of the employer, such as enhancing productivity, and the interests of employees in determining whether the group of employees was fairly chosen. In this regard, it is not only the interests of the employees covered by the agreement that are relevant; the interests of those employees who are excluded from the coverage of the agreement are also relevant.” [Emphasis added]

[76] The evidence has not established that the group of employees that would be specified in the scope order was geographically, operationally or organisationally distinct. The rail loop

driving work is one particular aspect of driving that any of the Qube employees working from any of the Sydney sites may be required to perform from time to time.

[77] It is relevant to note that there was no precise specification of the group that would be subject to the scope order. It was generally contemplated to be a group that would be described as being predominantly employed in the rail loop driving work. However, the concept of a scope order describing its application to be in respect to a group that predominantly performed particular work would introduce certain practical difficulties.

[78] One obvious difficulty would be that the application of the scope order would have a potential to fluctuate depending upon any specification of what represented the predominant performance and the usual fluctuation with which an individual might be required to undertake the rail loop driving work. For instance, if an individual was allocated to the rail loop driving work for a fixed period, perhaps to undertake that work during the absence of another driver, at what point would that individual be determined to be predominantly employed in the rail loop driving work?

[79] Further, it was clear from the evidence that there were logical, sound, business reasons for Qube to have a single enterprise agreement that covered all of its employees working from the Sydney sites. Importantly, the group that would be chosen, as could best be ascertained from the scope order, would create fundamental impediments for Qube to utilise all of its drivers working from the various Sydney sites in the most efficient arrangements available.

[80] Consequently, I am not satisfied that the group of employees proposed to be specified in the scope order being those employees that were predominantly engaged in the rail loop driving work, was a group of employees that has been fairly chosen.

Reasonable in the Circumstances - s. 238 (4)

[81] The final factor of the legislative requirements for a scope order is that it be reasonable in all the circumstances. This factor is directed towards an overall evaluation of the various aspects which have been identified as part of the examination of the other factors, namely: whether the applicant for the scope order has been bargaining in good faith; and, whether the scope order would promote fair and efficient bargaining; and, whether the scope order identifies a group that was fairly chosen. In addition, this factor provides for consideration of any other matters or particular circumstances which might be relevant and which should be given due consideration before any scope order is made or rejected.

[82] It should be noted that each of the paragraphs (a) to (d) of subsection 238 (4) of the Act are separated by the word “and”. Therefore, these constituent elements are cumulative requirements for the making of any scope order. Consequently, even if I was to consider that some factor might establish that the scope order would be reasonable in all the circumstances, the order could not be made unless all the other factors were satisfied.

[83] In this instance I am unable to discern that, in all of the circumstances, there is any basis to establish that it would be reasonable to make the scope order.

Conclusion

[84] This application for a scope order has been considered and determined in expedited proceedings. These arrangements were necessary because of the time at which the application for a scope order was made. The application for a scope order was made after the process for the voting to approve the agreement to replace the 2014 Agreement had commenced.

[85] The application has been considered and determined by reference to the four factors which I have extracted from the relevant operative provisions of the Act, namely, ss. 238 (4) and 238 (4A). These four factors require that any scope order must: (1) be made only if an applicant has been bargaining in good faith; and, (2) promote fair and efficient bargaining; and, (3) specify a group to be covered that was fairly chosen; and, (4) be reasonable in the circumstances.

[86] In this instance I have not been satisfied that the applicant has met the good faith bargaining requirements. Further, the evidence has established that the scope order sought would not promote both fair and efficient bargaining. In addition, the group of employees, as could be best discerned to be specified in the scope order was a group that was not fairly chosen, as it is a group that is not geographically, operationally or organisationally distinct. Finally, having regard for all of the circumstances it would not be reasonable to make the scope order.

[87] Consequently, the legislative requirements for the making of the scope order have not been met and in view of the conclusions that I have reached the application must be refused. An Order dismissing the application will be issued separately and the matter is concluded accordingly.

COMMISSIONER

Appearances:

Mr S Crawshaw,Senior Counsel, with Mr P Pasfield of Slater and Gordon appeared for the Maritime Union of Australia.

Mr M Seck of Counsel with Mr S Forster of MinterEllison appeared for Qube Logistics (SB) Pty Ltd.

Mr M Gibian of Counsel with Mr G Webb and Mr A Grumley appeared for The Transport Workers’ Union of Australia.

Hearing details:

2018.

Sydney:

March, 21 & 23.

<PR601390>

 1   The Maritime Union of Australia v Patrick Container Port Pty Ltd T/A Patrick Port Logistics [2015] FWCFB 2472.

 2   See for instance, Exhibit 9 Annexures DC-9, DC-12, DC-14 and DC-21.

 3   The Maritime Union of Australia v Patrick Container Port Pty Ltd T/A Patrick Port Logistics [2015] FWCFB 2472 @ [28].

 4   The Australian Maritime Officers' Union v Harbour City Ferries Pty Ltd and Others [2015] FWC 8003, see in particular paragraphs [59], [60] and [62].

 5   Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union; The Australian Workers’ Union; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2012] FWAFB 2206.

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